Search OpenLegislation Statutes

This entry was published on 2014-09-22
The selection dates indicate all change milestones for the entire volume, not just the location being viewed. Specifying a milestone date will retrieve the most recent version of the location before that date.
Contracts requiring down payments in escrow
General Business (GBS) CHAPTER 20, ARTICLE 36-C
§ 778-a. Contracts requiring down payments in escrow. 1. An escrow
agent who undertakes to hold a buyer's down payment in the purchase and
sale of a home shall have the fiduciary obligation to segregate and
safeguard the buyer's down payment in a special bank account, and shall
not commingle such down payment with the escrow agent's personal or
business funds.

2. A contract which requires that a down payment be held in escrow
shall identify the escrow agent and the bank in which the down payment
shall be deposited during the term of the escrow.

3. An escrow agent shall not be required to maintain a down payment in
a bank account which is separate from all other bank accounts, provided
the escrow agent's books of account and banking records shall accurately
show the allocation to each owner of all funds that are deposited in the
escrow agent's special bank account and all transactions relating to the
receipt and disbursement of escrow funds.

4. Unless the contract provides otherwise, an escrow agent shall not
be required to deposit the down payment in an interest-bearing bank
account. If the escrow agent is an attorney admitted to practice in this
state, a bank account authorized by section four hundred ninety-seven of
the judiciary law shall be a lawful depository for down payments held by
the attorney in escrow.

5. The provisions of this section may be modified by a written
agreement signed by the buyer, seller and escrow agent.

6. The provisions of this section are not exclusive and do not relieve
a buyer, seller or escrow agent from compliance with all other
applicable provisions of law, or from civil or criminal liability
imposed by other applicable provisions of law.